[oicdn]

I have about $3K I want to invest for the future, on top of monthly payments recurring monthly. I've read that dropping $300-400 a month into a Mutual fund through Vangaurd, I can be a millionaire by the time I'm 50 and retire.

I don't care about being a millionaire(I think if you dump that amount of money into anything, you'll be fairly well off in that time frame regardless, I think that's just a glamorous way of putting it, lol), I just want to invest some money for both my future and so my kid(s) will have a better life than I, and obviously, so I can fully RETIRE by 50.

My friend and his dad has a bunch of money tied into Dow and Nasdaq ( I can't remember what, but I know it's spread out thin, so it's minimal loss, not just a crapshoot into ONE company), and while we were eating lunch, he was telling me with every 50 points, he averages around $3-6K. He told me when he was younger he wish he woulda known so he could retire. he said because the intrest is compounding intrest, it makes money on top of money, and with continual deposits, it just increases exponentially.

So what do you guys recommend? I'm wanting to get a feel of more information on what the general population does, but the amount of info on investments is just overwhelming, and I'de rather not go to a broker and have them tell me where I should go, I'de like to be somewhat familiar or educated on it all...

 

[John E Woven]

Step 1: Buy headphones cheap that are rare.
Step 2: ???
Step 3: PROFIT !

 

[appophylite]

I currently keep all of my money that I do not need for day to day expenses, etc. in two separate CDs. It's a relatively low interest, but a rather safe return. However, I just talked to an investment banker my mother referred to me, and he and I looked over my finances and concluded that at the current point I am in my life, I could afford to transfer all the monies in the CD into a portfolio and not only would I get a better return on it, but if I were to lose it all in a stock market crash, I could still live with the loss. I've been considering it for a couple of months now, and probably going to go ahead with it in the next month or so. My advice if you are considering investing, is to find an investment banker that you feel comfortable with or that others may recommend to you and arrange to sit down and talk with him. Let him know what your financial situation is right now, and let him discuss how he would go about making a portfolio for you. Nothing is ever set in stone on the first meeting and more often than not, the IB can run a simulation and print off the data for you so that you could see a good simulation of how your money would grow over the years depending on what you add to the portfolio. Then, sit back with all of this data and do some heavy thinking, until you feel comfortable with the decision you've made and go for it.

 

[Jon L]

This is a tough market right now, but I recently moved some of my investments into international funds with good track records. Domestic funds have been disappointing, and I expect this trend to continue.

 

[Czilla9000]

Index funds, index funds, index funds

Go here and ask for advice: diehards.org

 

[RYCeT]

Quote:

Originally Posted by Jon L /img/forum/go_quote.gif This is a tough market right now, but I recently moved some of my investments into international funds with good track records. Domestic funds have been disappointing, and I expect this trend to continue.

If you know what you're doing, it's easy to make money now in this trouble market.

 

[Austin 3:16]

I've been buying as much oil stocks as I can afford. When's the last time you seen oil go down in price???

 

[classicalguy]

Being a millionaire is not what it used to be. To retire comfortably today, you need much more than $1 million, and by the time you retire you'll need more than one needs today. So get out of debt, and start saving now, and don't listen to all of the stupid people who live beyond their means.

The goal of investing is to buy low and sell high. It's a good time to buy stocks when they are relatively cheap, as they are now. Stocks are risky of course, and there are no guarantees, but with current very low interest rates and big market drops, it's a much better time to buy now than it was before the drop. Start putting money into a diversified Vanguard mutual fund until you have a better understanding of the market and want to take more risk for potentially better returns. Also, keep some money in the bank for emergencies, and built that fund too. Track your spending, and reconcile all of your accounts (checking, saving, credit cards, etc). There are on-line sites, or buy an old copy of Quicken or Microsoft Money. You'll need to keep track of everything for taxes.

Oh, and be frugal with audio purchases too. It's just as much fun to search out bargain audio equipment as to dump all your money into some gold-plated supergadget, and you can start saving for the things that are really important in life (house, family, education, retirement, etc.)

 

[navmau]

Quote:

Originally Posted by Austin 3:16 /img/forum/go_quote.gif I've been buying as much oil stocks as I can afford. When's the last time you seen oil go down in price???

I would be careful with this strategy, buying in at record highs is a recipe for big potential losses! e.g. Investments in S&P500 back in 2000/01 have still not broken even and are sitting in a position of loss after nearly 8 years. Its only for the young who have 20+ years to ride out the wave(s) but people who invested based on the common "suggested time frame of 7 years" are crying!!!

The strategy of diversification rings true in times like these, when markets fall 10-20% over a few months, fixed interest securities losing value premium blow-outs, LPT's (REIT's) valued at less than NTA and so on...its wise to be well diversified so over the long-term, your portfolio will deliver "smoother" and stronger returns.

If you are a short-term investor who needs to park cash, term deposits are the way to go...in Australia anyway, probably not so enticing with US rates.

If you invest in mutual funds then yes, adding amounts over the investment period can work out well as it takes advantage of "dollar cost averaging" which in simple terms means: buy less units when markets are high and more units when markets are low. This strategy also reduces the risk of investing a large amount of capital at the wrong time.

 

[Austin 3:16]

Quote:

Originally Posted by navmau /img/forum/go_quote.gif I would be careful with this strategy, buying in at record highs is a recipe for big potential losses! e.g. Investments in S&P500 back in 2000/01 have still not broken even and are sitting in a position of loss after nearly 8 years. Its only for the young who have 20+ years to ride out the wave(s) but people who invested based on the common "suggested time frame of 7 years" are crying!!! The strategy of diversification rings true in times like these, when markets fall 10-20% over a few months, fixed interest securities losing value premium blow-outs, LPT's (REIT's) valued at less than NTA and so on...its wise to be well diversified so over the long-term, your portfolio will deliver "smoother" and stronger returns. If you are a short-term investor who needs to park cash, term deposits are the way to go...in Australia anyway, probably not so enticing with US rates. If you invest in mutual funds then yes, adding amounts over the investment period can work out well as it takes advantage of "dollar cost averaging" which in simple terms means: buy less units when markets are high and more units when markets are low. This strategy also reduces the risk of investing a large amount of capital at the wrong time.

I don't forsee the price of oil dropping for a long, LONG time.

 

[navmau]

Quote:

Originally Posted by Austin 3:16 /img/forum/go_quote.gif I don't forsee the price of oil dropping for a long, LONG time.

Fair enough, as long as you have done your research.

I remember a time where analysts thought the Nikkei, which was sitting around 40,000, would grow and grow and then BAM!!!

Its currently at 13700.

 

[Austin 3:16]

I do have a set date to cash out though...

 

[jjcha]

This is the classic treatise. Unless you derive entertainment value from speculation or have access to information that is not disseminated in the market, I would suggest following the approach therein.

Amazon.com: A Random Walk Down Wall Street: Including a Life-Cycle Guide to Personal Investing: Burton G. Malkiel: Books

Incidentally, I find the review to be misleading. I imagine (nearly) everyone on Wall Street is familiar with the concepts in the book. Some may make careers doing better (and more power to them). But for the average person investing, this is where I point them.

Saving 3k a month is pretty darned good for most people. Make sure to minimize your taxes as well as transaction fees.

Best regards,

-Jason

 

[oicdn]

3k a month??? Damn....that's insane. Many people don't have 3K after bills and living expenses are done, let alone to SAVE....

I've been reading a bit since posting and it seems many of the media out there is geared towards people who want a LARGE return over 5-10 years and cashing out. I'm looking VERY long term, as in 20-30 years and being comfortable without having to work. Not rich or anything, but just good.

 

[fordgtlover]

Based on my quick and dirty Excel calculations. To start with $3K and invest $400 p/m you would need an average annual return of 10% to get close to a Million dollars over 30 years. (Please correct me if this is wrong)

Can anyone tell me where I can average a guaranteed minimum of 10% p/a return over 30 years?